One of Britain's grimmest wartime secrets, the harrowing tale of how scores of young soldiers were massacred by their own side on a Devon beach, can now be told.

Corroborating eyewitness accounts have revealed how American troops were killed by their own side in a terrifying 'friendly fire' disaster during training exercises for D-Day, 60 years ago. Many of the witnesses have carried their stories to the grave, but their families insist that the truth must now be acknowledged.

Their accounts tell how the sea ran red with blood as bodies bobbed in the surf and corpses were piled on the sand. As the scale of the tragedy sank in, the dead were hidden in a secret mass grave.

The authorities have never acknowledged what happened at Slapton Sands on 27 April, 1944. Now, a compelling dossier of evidence compiled by The Observer hints at a lengthy cover-up.

Officially, all the deaths in the D-Day training exercises have been attributed to a surprise attack on an Allied convoy, codenamed T-4, by German E-boats the following day, when more than 700 men died off the Dorset coast.

Now as commemorations to mark the 60th anniversary of the Normandy landings are finalised, the official version of events can be challenged by testimony about the earlier tragedy at Slapton Sands. Statements collected by The Observer over several years reveal a truth almost too awful to contemplate, perhaps explaining why the Pentagon suppressed the details.

The accounts of those present that day indicate that, as thousands of GIs swarmed ashore from landing craft, they were cut down by bullets fired by comrades playing the role of German defenders, who had for some reason been given live ammunition.

Letters reveal how Lieutenant-Colonel Edwin Wolf, from Baltimore, heard several shots 'zinging' past his ear as he observed the exercise from a vantage point nearby, and saw 'infantrymen on the beach fall down and remain motionless'. Under a hail of fire, Wolf quickly retreated.

Bullets also whizzed past Hank Aaron from West Virginia, driver to a general observing the exercises. Aaron scrambled from the line of fire, then looked up and saw five men dead.

Royal Engineer Jim Cory watched dumbfounded from an observation post as soldiers streaming from landing craft were 'mown down like ninepins'.

'We later found out it was a mistake. They should have had dummy ammunition, but they just carried on shooting, said Cory, who counted 150 bodies before he fled.

What he saw that day tormented him until his death last year. His widow, Mary, who recounted his story last week, said: 'He always hoped that one day he would get an official answer.'

His desire for confirmation of what happened was shared by London fireman Maurice Lund, who left a macabre taped confession on a cassette with his will, describing heaps of dead GIs left in the surf.

Yet there is not a single official mention in Army records of any bodies being found on Slapton Sands. Nor has the Pentagon ever mentioned any friendly-fire disaster in Devon that spring.

What happened to the bodies provides another twist to the secret of Slapton Sands. Witness statements suggest they were interred, at least temporarily, in a mass grave nearby. Detailed records kept by the station master at Kingsbridge, five miles away, reveal that three trains were secretly loaded with the bodies of GIs under military guard between July and August 1944. The trains, each able to carry at least 100 corpses, 'were crammed with men dug from mass graves', said local rail historian Ken Williams.

'The bodies were extricated after D-Day. A friend knew a man involved in the removal but he died before I could contact him', said Williams.

The historian's father, George, who served in the Royal Navy during the war, Williams soon realised the also saw the bodies of dozens of men killed by friendly fire washed ashore on the sands. 'He told me how the sea turned red.'

There was no shortage of potential burial sites in the remote fields behind the beach. Suspicion that US troops dumped bodies in hastily built graves around nearby Blackawton was first aroused 20 years ago, when Dorothy Seekings, a baker's daughter who supplied bread to the troops during the exercises, said she had seen lorryloads of GIs' bodies being buried near the village.

Seekings was ridiculed at the time, yet her description and the location now seem to match closely that of farmer Francis Burden, who sold the Americans fresh milk. One morning in April 1944, Burden stopped short as he crossed a narrow lane leading out of Blackawton.

A huge pit, up to two acres in size, had been dug by US troops, enough to take scores of coffins. Boxes big enough to hold a man were stacked nearby. Today, a discernible mound marks the location.

After the war, the field belonged to farmer Nolan Tope. Just before he died, Tope was asked if US troops had ever been buried on his land. He replied that Seekings 'knew only a small part of it' but vowed to take his secret to the grave.

His son Nigel discounts the mass grave theory, adding: 'In all my time farming here, I've never found anything suspicious, no bones, nothing.'

But another resident, who requested anonymity, is adamant that there was a large hidden grave.

Local author Ken Small, whose book The Forgotten Dead broke the story of the E-boat attack, dismissed the rumours until just before he died last March. He told the historian Williams that Seekings had been right. 'I was stunned,' said Williams.

Even so, many people still refuse to accept that hundreds of US soldiers may have been interred in the sleepy Devon countryside 60 years ago. Such scepticism fails to explain the account of former land girl Joyce Newby, who helped to make hundreds of coffin lids at a nearby timber yard in spring 1944. She said they were for victims of friendly fire at Slapton. Or that of former US serviceman Harold McAulley, who tells of dragging dead soldiers off the sands and later helping to bury corpses - the faces black with oil and burning - in a mass inland grave.

Yet the fresh evidence of the witnesses and finds of skulls and bones at Slapton and on nearby beaches over decades have not changed America's insistence that there was no friendly fire disaster. The Pentagon refuses to countenance that a second tragedy may have occurred during D-Day exercises.

A spokesman for the US Army Centre of Military History said: 'We don't know of any official incident other than the German T-4 convoy.'

Relatives draw hope from the fact it took 40 years for the truth behind the E-boat attack to be revealed. Three weeks ago, a remembrance service was held at Slapton Sands for the 749 US soldiers recognised as casualties of that catastrophe.

How many died in an earlier, similarly bloody incident may never be known.